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How big is the impact of infrastructure on trade? Evidence from meta-analysis

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  • Celbis, Mehmet Güney

    () (UNU-MERIT / MGSoG, Maastricht University)

  • Nijkamp, Peter

    () (Vrije Universiteit Amsterdam)

  • Poot, Jacques

    () (University of Waikato)

Abstract

Low levels of infrastructure quality and quantity can create trade impediments through increased transport costs. Since the late 1990s an increasing number of trade studies have taken infrastructure into account. The purpose of the present paper is to quantify the importance of infrastructure for trade by means of meta-analysis and meta-regression techniques that synthesize various studies. The type of infrastructure that we focus on is mainly public infrastructure in transportation and communication. We examine the impact of infrastructure on trade by means of estimates obtained from 36 primary studies that yielded 542 infrastructure elasticities of trade. We explicitly take into account that infrastructure can be measured in various ways and that its impact depends on the location of the infrastructure. We estimate several meta-regression models that control for observed heterogeneity in terms of variation across different methodologies, infrastructure types, geographical areas and their economic features, model specifications, and publication characteristics. Additionally, random effects account for between-study unspecified heterogeneity, while publication bias is explicitly addressed by means of the Hedges model. After controlling for all these issues we find that a 1 per cent increase in own infrastructure increases exports by about 0.6 per cent and imports by about 0.3 per cent. Such elasticities are generally larger for developing countries, land infrastructure, IV or panel data estimation, and macro-level analyses. They also depend on the inclusion or exclusion of various common covariates in trade regressions

Suggested Citation

  • Celbis, Mehmet Güney & Nijkamp, Peter & Poot, Jacques, 2013. "How big is the impact of infrastructure on trade? Evidence from meta-analysis," MERIT Working Papers 032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2013032
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    File URL: https://www.merit.unu.edu/publications/wppdf/2013/wp2013-032.pdf
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    References listed on IDEAS

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    Cited by:

    1. Celbis M.G. & Crombrugghe D.P.I. de, 2014. "Can internet infrastructure help reduce regional disparities? : evidence from Turkey," MERIT Working Papers 078, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Mehmet Guney Celbis & Peter Nijkamp & Jacques Poot, 2015. "Infrastructure and the International Export Performance of Turkish Regions," World Scientific Book Chapters,in: THE REGION AND TRADE New Analytical Directions, chapter 11, pages 319-350 World Scientific Publishing Co. Pte. Ltd..
    3. Kashiha, Mona & Thill, Jean-Claude & Depken, Craig A., 2016. "Shipping route choice across geographies: Coastal vs. landlocked countries," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 1-14.
    4. Celbis, M.G. & Crombrugghe, D. de & Muysken, J., 2014. "Public investment and regional politics: The case of Turkey," MERIT Working Papers 020, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    Infrastructure; Trade; Transportation; Communication; Public Capital; Public Goods; Meta-Analysis;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • F10 - International Economics - - Trade - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • F19 - International Economics - - Trade - - - Other
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

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